The Great West Life Insurance Company

The Great West Life Insurance CompanyEstablished in 1891, The Great-West Life Insurance Company ranks among the top 20 life insurance companies in North America, with more than $15.5 billion in assets, $127 billion of insurance in force and $3.5 billion of premium income in 1987.

A subsidiary of Great-West Lifeco Inc. and a member of the Power Financial Corporation group of companies, Great-West Life offers a wide range of insurance products and services for individuals, businesses and groups, including life and health insurance, and retirement income and planning products. More than 7,000 staff and sales representatives serve their clients through 160 offices across Canada and the United States. The Canadian and corporate headquarters are located in Winnipeg, Canada, with United States headquarters in Denver.

Great-West Life’s corporate mission is “to achieve excellence in providing financial products and services for people, and to do so in a responsible manner.”

TIPS FROM THE PROS
“The basic merchandise we were selling was subject to question for the first time in over 100 years.”
Chuck Brown, vice president, Great-West Life Assurance Company. Introduced to the Canadian public through Great-West’s agents, Living Life was backed by a coordinated series of supportive literature (Fig. 2-3). The company did virtually no mass media advertising. Chuck Brown, vice president of Individual Marketing, explains why. “We believe that consumers do not buy insurance from an ad, but through one of our agents because of a feeling of trust in that person.”

Although the firm endured a gruelling six-month adjustment period post-product launch, sales took off in 1983 and by 1985, more than 60% of the firm’s $23.5 million revenue could be attributed to the new product. Living Life’s success can be traced to satisfied customers. Since the introduction of Living Life, the firm has conducted regular focus group sessions with policyholders.

Brown summarizes the findings to date, “Policyholders feel really good about what they have, about Great-West Life, and about their agent relationships. They also say they finally understand their policy!”

PRODUCTS FOR THE CAUTIOUS INVESTOR
Most of what we’ve talked about so far illustrates that the products you develop depend on just who you’d like to attract. But the selection of your target market does not automatically eliminate creativity on your part. Let’s look at an example of two Canadian firms interested in wooing the same customer group — those people who’d like to dabble a bit beyond the realm of guaranteed products but are hesitant to lose their savings.

ROYAL TRUSTCO LIMITED
THE GUARANTEED MARKET INDEX INVESTMENT
Royal Trustee Limited cornered well over a million dollars from this consumer group with a new product called “The Guaranteed Market Index Investment” (GMII). A nationwide survey of upscale consumers conducted in 1986 by the company uncovered an important fact about Canadians.

Over the past few years, these people, traditionally wedded to saving exclusively through guaranteed investments, have become increasingly dissatisfied with the low rates of return available on such safe securities. However, they balk at having to assume the greater risk inherent in the better-payout securities. To them, it seemed that the choice was either high risk-high return or low risk-low return, with a large gap in between.

Enter Royal Trust to the rescue, championing an innovative new product to bridge this investment gap, its Guaranteed Market Index Investment. Because the rate of return on this product is tied to up-swings in the Canadian stock market index, with downturns resulting only in the customer receiving no interest, the ‘I’d rather not get both feet wet’ crowd could have the best of both worlds. A $600,000 advertising campaign concentrated in newspapers and magazines heralded this new investment product.

Within two months, the GMII project had coaxed traditional guaranteed product users to transfer several million dollars from other financial firms, nearly 50% of Royal Trustco’s revenue from this product.

In an astute proactive move taken on October 14, 1987 (remember the October 19th stock crash?), the company introduced a ‘bear market’ version, which promised rich rewards if gold or the Toronto or New York stock indices tumbled.

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